Mark Carney: Bank of England must be 'vigilant' about housing boom

Bank of England Governor Mark Carney warns that the bank must be "vigilant"
about the two-speed housing recovery in the UK, with "pockets of the
country" still seeing no improvement in property prices.

Governor Mark Carney defended the Bank of England's radical new forward guidance policy today, insisting it has "reinforced the recovery".

Mr Carney told MPs the new strategy of linking interest rate rises to unemployment has given households and businesses greater "certainty and clarity".

And he told the Treasury Select Committee the Bank remains "vigilant" over a house price bubble, as prices and demand are pumped up by Government stimulus schemes. It could recommend banks set limits on how much households can borrow, he said.

Mr Carney said the Bank is watching the housing market closely as it recovers - but insisted the market pick-up should be seen in context, and remains a third to a quarter below pre-crisis levels.